Stephen Nuñez: Like Card and Krueger basically started the "hey, maybe supply and demand under perfect competition is not the best way to think about existing labor markets" backlash and they did it with empirical studies.

…what do people think supply and demand means?

In their defense, I've had people argue with me in all sincerity that wages always equal marginal revenue product, which isn't less stupid

I used to think we should teach better economics in high school and have slowly swung back around the other direction and am coming to the conclusion that actually, we need to stop showing teenagers the fake demand curve

I would gently push back on 'fake' but it has to be stressed that in the real world things work -vaguely- like this to the degree we can empiricize them at all, but there are limits to the practice and approach. There are goods that don't follow these rules at all price points! Negotiation happens!

I admittedly did not do very well in AP econ but I distinctly remember looking at the graph and being like "this is extremely not how it works" even at 16. Took me YEARS and three advanced degrees to figure out wtf my teacher was trying to get at because tbh I don't think she really understood it

i did not do well in ap econ either. granted i have no idea if my teacher was any good (almost certainly not) because i was too stoned or just didn’t show up i have some doubts ap econ has much merit tbh

even if the teacher is good: it’s just way, way too much material to cram into a semester of hs without dumbing down so much that it’s useless imo

What's dumb is pretending econ is a science instead of ideology

It grows out of very specific ideological strains in the 17th century and a surprising amount, even to the modern day, is essentially rhetorical and conjectural. At the same, price studies exist, price elasticates are calculated, and so-called 'non-empirical' economics is even more batshit

An interesting tidbit is that Applied Economics is an adjacent field that often has distinct PhD programs

“econometrics” turned out to be useful

Econ is a young discipline and a lot of current CW is going to turn out to be catastrophically wrong, in the eyes of the discipline, in a few decades. but it’s also been wildly productive despite a long history of being mostly wrong (which is what any young discipline has)

i think the basic (or a basic) keynesian framework will hold up pretty well. lot of stuff will look very dumb though

But don't use macroeconomics as a stand-in for economics as a whole. Labor and development economics are largely empirically oriented and heavy on experiments and quasi-experiments and bear little resemblance to the toy model world of macro-theory.

Like Card and Krueger basically started the "hey, maybe supply and demand under perfect competition is not the best way to think about existing labor markets" backlash and they did it with empirical studies.

Extremely exciting work on stuff like labour monopsony that are super interesting, comes from theoretical backround, and helps explain exactly why labour bargining power waxes and wanes. Super interesting, relevant and testable!

(there's just also people making 5-agent DGSE models, fitting them to loose demographic stuff, and also saying "2008 might've been good for young people, because of home price decline")

I still remember 1st year graduate macro where Kocherlakota presented us with a model that showed people were better off during recessions because of increased leisure time.

the same kocherlakota who used the fisher equation to argue umbrellas cause rain?

i just know ed prescott is looking up at all of us and smiling

my macro professor was also a minnesota/chicago guy. very much of that prescott/rbc world but tbf was actually a really good professor

In defense of Kockerlakota, his tenure at the Minneapolis Fed showed he was willing to update his understanding of the world based on new data.

oh he seemed fine but i just always remember that speech on the fisher equation and how half the macro guys with blogs nearly stroked out. big “math guy could’ve used a good social science grounding” vibe

Macro was a moment for me, when I said "Why am i tolerating this obvious bullshit" but then there's other macro people who are extremely smart and clever, and working on deep financial plumbing, and gritted through it.

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